Despite its disappointment with its business so far in the former Soviet Union, Siemens AG is involved negotiations on a large-scale $700m project to manufacture telecommunications equipment at several Russian defence industry enterprises in Moscow, Ulyanovsk and Saratov. The project is aimed at domestic customers, therefore generating roubles, which are to be invested in the petrochemical industry. The project was developed with the assistance of the Interprivatizatsiya privatisation fund. Siemens’ Russian operation is serious need of business. Under pressure from Germany, the Moscow office has been given instructions to lower its overheads significantly and to cut its payroll, which is large by Moscow standards for a western company.
